Verizon goes “cha-ching” with new mobile payment service

We here in the US are WAAY behind the curve when it comes to things we can do with a cell phone. Yes, with the invention of the iPhone and Android phones, we can do more with all of the applications developers make available to us. This is all well and good, but what about those folks with “normal” cell phones? They call call, text, take a photo, and sometimes surf the web. Meanwhile, in other countries, you can do anything, including buy goods and services direct from the phone using either bar codes or text messages. Nothing that requires an “app” per se.

Well, Verizon is changing things around by launching a new mobile payment service. According to a post on Slashdot, with input from GigaOm:

The service, based on technology created by Danal, will require text messaging-enabled phones, and that purchases be made from Verizon-approved online stores, which include game sites and social networks. It will require that customers click a BilltoMobile button during checkout from a participating online Web site. Users will be asked to input their mobile numbers and mobile billing zip codes for authentication. Once the user is authenticated, a one-time passcode will sent to his or her phone. The number is then input into the online checkout window. At that point, the transaction is complete and the charge will appear on the customer’s monthly phone bill. GigaOm writes, ‘If Verizon can get people accustomed to putting in their phone numbers instead of credit cards while shopping online, then it could own a critical element in building an application and services platform that spans the wired and wireless world … Much like Apple has such a large stake in the mobile application and commerce space today because it has millions of credit cards in iTunes, Verizon could be expanding its own payments information for a similar goal.'”

This will certainly bring the idea of using your phone to pay for things back into focus here in the US. This idea has been bounced around on and off for years, but has never really caught on. Maybe with Verizon backing it this time, it may take off. Would it be so bad to not have to take your wallet with you to pay for things, only use your phone?

Comments

Well, late night commercials have been offering me services charged to my phone for years.

In my opinion, the problem with pay-by-phone for generic goods (ie not phone-use related) is that it’s no more convenient than using your debit/credit card. What would motivate a person in the habit of using a card to switch to using the phone for billing?

Furthermore, it does pose a security question. If you lose your phone, your account could be billed for large amounts of goods. While the same comes from losing credit cards, those companies offer fraud protection and cancellation of physical cards (to be replaced with a new one). The lack of knowledge of programs like this could surprise someone at the end of the month if they lost their phone and it was run up with charges. Plus, people in general (at least in the physical world, maybe not the internet) know to be careful with their credit cards. You wouldn’t let a stranger borrow your card, would you? But what if someone asked to borrow your phone to make a quick call? While making that call he authorizes a ton of purchases with you none the wiser until the end of the month.

I’m from New York but am staying in Sweden for a few months. They have been charging things to their phone for a while. It’s actually quite convenient. Let’s say you need to get on the metro, boom, text a number and purchased directly on your phone. No need to stand on line and pay at a counter. You can do it at your own convenience. I think this is a great concept and it will seriously hurt the greedy credit card companies that raking in billions of dollars a year on service fees.

It will definitely take some adjusting to get Americans to start using it, but I think it’s possible. For example, in Sweden, certain services are cheaper if you pay for it on your cell phone.

I don’t want to pay for things with a phone. I always carry my wallet, and a single credit card is unnoticeable inside it. (I keep it thin, unlike some people’s bloated wallets.) If I switched to phone payment, I’d HAVE to carry the darn phone around everywhere. Sure, it’s likely that I’d carry it most places, but I don’t want to have to.

Plus, what if you have an iPad (or other tablet), or netbook, or other device for communication that doesn’t hook into this payment scheme? Yea, no thanks. I’d rather keep my money decoupled from my computers.

I like credit cards. They are convenient, and I actually gain money (little though it may be) by using mine, thanks to cash-back rewards. Just pay the balance every month. Carrying a balance is retarded.